Another Shark in the Ocean? - Perusal ...
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Tesla continues to dominate the electric vehicle industry in the US While Tesla (NASDAQ: TSLA) has been on a phenomenal run over the past few years, its success story can be attributed to its technological know-how, its charismatic co-founder and a little bit of luck. When most of the other clean-tech companies were being tested to survive in the ICE dominated automobile industry, Tesla stood out as a bright star by introducing Model S, which outsold global giants including Porsche (ETR: PAH3, ETR: VOW3), Fiat (NYSE: FCAU), Buick, Jaguar (NSE:TATAMOTORS, NYSE: TTM), Land Rover and five other automobile car’s sale in California. Tesla Dominates The US Electric Vehicle Market U.S. electric vehicle sales share (based on unit sales between January & June 2017) 2% Ford Focus | BMWi3 | Kia Soul Other 6% Tesla Model S 29% 4% VW e-Golf 8% Fiat 500e 15% Nissan Leaf Tesla Model X 16% 16% Chevrolet Bolt Source: Forbes, Moody’s Tesla made several successful strides in the electric vehicle industry where other electric car companies, including Fisker and other cleantech companies, have failed. Following strategies have supported Tesla to expand in the electric automotive industry - www.perusalglobal.com | 2
High-acceptance of Focus on the creation The belief that Vertical integration has Tesla's cutting-edge of a niche segment for “Fashion drives supported the battery technology and high-end electric cars interest in Cleantech” production of batteries electric powertrain proved to be successful and powertrains at amongst automotive economical prices giants Electric vehicle industry is flooded with new EV launches from some of the most reputed manufacturers Most experts believe that the world is at a tipping point in electric mobility. As a result, we are witnessing a heavy influx of electric vehicle launches across the world, especially the US. Majority of the manufacturers of these electric vehicles and plug- in hybrids have proven capabilities to overtake the production volumes of the Californian start-ups. Following are some of the electric vehicle models that debuted in 2018 and are expected to hit roads in 2019. These mainly include Audi (ETR: NSU), Jaguar, Aston Martin, Nissan (TYO: 7201) and Tesla. www.perusalglobal.com | 3
Audi Q8 - 2018 The latest five-seat crossover sportback which was seen in the US dealerships late last year provides a plug-in hybrid powertrain. It's likely to be upgraded in 2022. Jaguar I-Pace - 2018 The luxury crossover electric vehicle was seen in the showrooms in November 2018. Waymo, the former Google self-driving car project, has ordered 20,000 units for its self-driving fleet. It has a 0 to 60 mph time of fewer than 5 seconds, off-road capability and a range of nearly 240 miles on a charge. It is expected that a higher-performance version will be rolled out by 2021. Aston Martin Rapide E - 2019 Aston plans to transform its four-door model into an electric vehicle, which is expected to be launched by the end of 2019 with over 155 units. The company has not released performance data or prices for the Rapide E, but according to the CEO, Andy Palmer, the car would cost around USD 260,000. Audi A6/S6 - 2019 Audi A6/S6 is due to be redesigned in 2019, and an e-tron plug-in hybrid version is expected to be available in the US by the end of the year. Audi e-tron - 2019 Audi e-tron would go on sale in 2019 in the US to lead Audi's bid to capture electric vehicle market share in the premium segment. According to Audi, e-tron is similar in size to a Q7, with a range of nearly 250 miles from its 95-kilowatt-hour battery and is priced at USD 75,795 for the base trim. The e-tron Sportback is expected to arrive in the markets by late 2019. Nissan Leaf - 2019 Nissan's battery-powered car was redesigned during 2018 and will carry over with minimal changes for the next two years. A second version of the car will appear in early 2019, containing a new battery with a significantly longer driving range and a higher price. The Source: Automotive News extended-range Leaf is expected to offer approximately 225 miles of battery range, 50% more than the current Leaf. Tesla Model 3 - 2019 According to Tesla CEO, Elon Musk, the much-anticipated USD 35,000 base-price version of Model 3 will go into production in the first quarter of 2019. Tesla Model S and Model X - 2019 Tesla is expected to revamp the interior of its Model S sedan and Model X crossover in the third quarter of 2019. The new interior will harmonize the company's older products with the Model 3 by consolidating controls into a single horizontally oriented touch screen. Tesla Model Y - 2019 A crossover based on the Model 3 is to be unveiled between late 2018 and mid-2019. The Model Y would be built at a new factory, with the start of production targeted for 2019. Source: Automotive News www.perusalglobal.com | 4
Majority of the newly announced electric models fail to set a new benchmark in the electric vehicle industry against Tesla’s proprietary Model 3 Despite the increasing number of upcoming electric vehicle models, Tesla's Model 3 is not expected to face a serious challenge. Following an analysis of every announced electric vehicle in the US until 2022, it has been found that Tesla’s Model 3 not only features a next-generation military-grade technology but also possesses a battery pack which stands ahead of most of the currently produced electric vehicles. Moreover, the company has made technological strides in developing an inverter in the electric motor. Tesla Electric Cars Other manufacturer Battery range over time Size of circle indicates price 1,000 $225,000 2nd gen Roadster 800 $7,700 Audi e-tron Porsche Model S 90D Jaguar I-Pace Taycan VW.I.D Crozz Model 3 (75 kwh) Range (km) 600 Model 3 (53 kwh) 400 EQ C Model S 70D Model X 200 0 2009 10 11 12 13 14 15 16 17 18 19 20 Source: Financial Times, UBS, Goldman Sachs www.perusalglobal.com | 5
A critical tenet which needs to be answered: Will Tesla retain its technological edge over the long run? Having superior products may not guarantee Tesla success over the long run. A classic example of this type of technological disruption would be the fall of Betamax against the inferior VHS videotape technology in the 1990s. Instead, Tesla is competing with some of the most established players who produce cars at scale and quality without much efforts, which historically most of the Californian groups have struggled with. Although Tesla has a technological edge over most of its peers, the entrance of automobile giants into the electric vehicle industry is expected to make the competition interesting. Some of the pertinent questions which need to be addressed for the long-term sustenance of Tesla include: 1 2 3 4 Will this big Will Tesla be able Will Tesla be able Will Tesla's electric onslaught to compete with to match the Gigafactory threaten Tesla, or the new and economies of scale support the will it attract more already enjoyed by the company to participants in the established automotive giants? achieve the likely battery vehicle domestic and production targets? markets that international would further automobile expand Tesla’s competitors? potential market opportunities? www.perusalglobal.com | 6
About Us Perusal Global is an offshore financial research and analytics organization, with specialization in cleantech, life sciences and consumer sectors. Our team of seasoned professionals has rich experience in executing investment, equity, business research and consulting projects across asset class world over. In the past, we have provided support for company research, industry research and financial modelling covering more than 100 tickers in the US. These include companies in the clean transportation technologies, electric vehicle/motion technologies, fuel-cell technologies, emission control solutions, renewable energy systems, waste management technologies, etc. We would be happy to aid your business intelligence in the electric vehicle market through: £ Business opportunities assessment £ Market share analysis £ Competitive positioning analysis £ Detailed financial model capturing key drivers, enabled with plug and play capability Please feel free to write to us at info@perusalglobal.com for any further queries/clarifications. Perusal Global Solutions 401, Swaroop Centre, Near International Airport, Andheri (East), Mumbai 400059, India E: info@perusalglobal.com M: +91 98190 20945 W: www.perusalglobal.com www.perusalglobal.com | 7
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